Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.
Conservative Party candidate Yoon Suk-Yeol, a former top prosecutor who promised to deregulate the crypto industry, will become South Korea’s next president.
The election was one of the closest in South Korean history. Yoon beat his opponent, Lee Jae-myung of the ruling Liberal Party, by less than one percentage point on Wednesday, according to the Associated Press.
Crypto was one of the hottest topics during the election. Both Yoon and Lee announced crypto-friendly stances in an attempt to win over younger voters.
Increasing levels of household debt and stagnating salaries have pushed many young Koreans to turn to the stock market and crypto investing to get ahead, but the current government under President Moon Jae-In has cracked down on crypto. Strict regulatory changes saw nearly 70 Korean exchanges shut down in 2021, leaving only a handful operating.
Across South Korea’s top three exchanges, there are more than five million individual crypto accounts – representing nearly 10% of the country’s population.
Unicorn hunting and reducing crypto taxes
During his campaign, Yoon promised to deregulate the crypto industry. At a crypto conference in January, Yoon said regulations “that are far from reality and unreasonable” must be overhauled in order to “realize the unlimited potential of the virtual asset market.”
Yoon expressed his desire to attract and develop crypto “unicorns” – startup businesses valued at $1 billion or more.
Yoon also pledged to raise the proposed threshold for capital gains taxes to kick in on cryptocurrency profits to KRW 52.4 million (US$42,450). Starting in 2023, a 20% tax is to be levied on crypto gains above KRW 2.5 million ($2,024) earned in under a year.
Yoon has also promised to “take legal measures to confiscate crypto profits gained through illegitimate means and return them to the victims.”
Some of South Korea’s biggest companies in the entertainment and gaming sector have indicated an interest in crypto, pledging during their annual shareholder meetings to create non-fungible tokens (NFT) or play-to-earn games.
Lee, the runner-up, focused his efforts on courting those gaming companies. He set up a gaming and metaverse task force and promised to make the country a crypto hub. Lee also released his own NFTs and said he would accept campaign donations in crypto.
Meanwhile, there are at least 14 crypto-related bills currently circulating in the South Korean parliament, and the lack of clear regulation has frustrated many in the industry.
“Something has to happen after the presidential election,” Harold Kim, former director of the Korea Blockchain Association, told CoinDesk in February.